USD/JPY Forecast: Holding ground and poised to retake 110.00
|USD/JPY Current price: 109.81
- Japanese Tertiary Industry Index came in negative for December but beat expectations.
- US Retail Sales and Michigan Consumer Sentiment to close the week.
- USD/JPY consolidating near yearly highs could test the 110.30 region.
Major pairs are in a consolidative mode this Friday, hovering around their Thursday closing levels. The market has digested the latest on the coronavirus outbreak and moved past fears. Wall Street closed in the red but off its daily lows, leading to gains in some Asian indexes. European ones trade in the green, while yields hover around their previous closing levels, in-line with a better mood.
Overnight, Japan published December Tertiary Industry Index, which came in at -0.2%, better than the -1.6% expected. To close the week, the US will publish January Retail Sales, foresee up by 0.3%, and the preliminary estimate of the Michigan Consumer Sentiment Index for February, seen at 99.5 from the 99.8 previous. The country will also unveil January Industrial Production and Capacity Utilization.
USD/JPY short-term technical outlook
The USD/JPY pair stands at around 109.80, neutral according to the 4-hour chart, but not far from this year highs. In the mentioned time frame, the pair is unable to surpass a flat 20 SMA which stands a handful of pips above the current level, but above the larger ones which also lack directional strength. Technical indicators head nowhere around their midlines. However, in the daily chart, the positive momentum remains, skewing the risk toward the upside. A critical resistance level comes at 110.28, this year high, and the level to surpass to confirm a bullish continuation heading into the weekend.
Support levels: 109.40 109.00 108.65
Resistance levels: 109.95 110.30 110.60
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